New York — After over 40 years in business, Party City is closing all of its locations.
In a meeting on Friday, CEO Barry Litwin informed corporate staff that Party City is “winding down” operations immediately and that today will be their last day of work.
“That is without question the most difficult message that I’ve ever had to deliver,” Litwin stated during the video conference call to have the meeting. He went on to say that Party City’s “very best efforts have not been enough to overcome” its financial difficulties, which led to the company’s demise.
“It’s really important for you to know that we’ve done everything possible that we could to try to avoid this outcome,” Litwin stated. “Unfortunately, it’s necessary to commence a winddown process immediately.”
In September 2023, the chain, which is the biggest party supply retailer in the US, came out of bankruptcy. As part of that strategy, the company’s stock was dissolved, roughly $1 billion in debt was cancelled, and most of its 800 US locations remained operating.
Party City’s revenues this year were stretched by its more than $800 million debt, even if it was able to avoid the same fate as 99 Cents Only Stores and Bed Bath & Beyond in the near term.
According to its most recent financial filings, the corporation closed around 80 locations between the end of 2022 and August 2024.
In a prior statement, Party City claimed to have renegotiated a large number of its leases and left “less productive locations,” which kept many of the chain’s employees in their jobs. As of 2021, the company employed 10,100 part-time employees and 6,400 full-time employees.
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After failing to pay off its $1.7 billion debt, Party City declared bankruptcy in January 2023.
It was thus delisted from the New York Stock Exchange as well.
Only four months ago, the New Jersey-based corporation named Litwin as its new CEO. As he stated in a LinkedIn post, the company’s “main priority is to strengthen our financial health, and there is work ahead of us.”
According to the company’s most recent financial statements, Party City’s net revenues for the three months ended in September 2023 dropped to $407 million from $502 million during the same time in 2022.
With e-commerce sites and pop-up concepts like Spirit Halloween becoming more and more competitive, the company that sells balloons, Halloween costumes and other party supplies has struggled.
Smaller chains were also destroyed by competition from big-box stores like Amazon, Walmart, Costco, and others.
Its vital balloon business was also negatively impacted by a scarcity of helium and increased expenses during the pandemic.
As consumers reduce their discretionary spending due to the rising cost of living, the chain joins an increasing number of retailers that have filed for bankruptcy this year. Notably, Big Lots declared on Thursday that it was beginning “going out of business” specials at every one of its stores following the failure of a private equity firm’s bid to save the bankrupt retailer.
According to Core sight Research, major chains are expected to close more shops in 2024 than they have in any other year since 2020.
